Shares in the financial sector gained as resurgent consumer spending supports the view that credit demand will remain healthy.
American Express posted higher sales and profit in 2Q, thanks to more spending among its credit card members. Amex posted a profit of $3.11 billion, or $4.53 a share, in the quarter ended June 30, compared with $2.89 billion, or $4.08 a share, a year earlier. Analysts polled by FactSet expected $4.40 a share. Revenue net of interest expense rose 10% to $19.64 billion. Analysts surveyed by FactSet had forecast revenue of $19.70 billion. The increase in sales was primarily driven by higher card member spending, which increased 9%, the highest growth rate in three years. Card fee revenue also rose, as did net interest income, due to growth in card balances.
Booz Allen Hamilton said demand is picking up across several parts of its business and that cost-cutting initiatives are bearing fruit, resulting in higher-than-expected profit during the recent quarter. The company's growth currently stems from its national-security portfolio, Chief Executive Horacio Rozanski said. Accordingly, Booz Allen has prioritized investments in advanced cyber and defense technologies, as well as in next-generation technologies such as autonomy, physical artificial intelligence and quantum.
